Thursday, October 07, 2010

Is the U.S. a Currency Manipulator?

The trade-weighted U.S. dollar index has depreciated by almost 40% over the last ten years vs. the world's major currencies (see chart above). Does that make the U.S. a currency manipulator? Here's a little editing fun of this article:

"ChinaThe United States flatly denies that its currency manipulation undervalues the renminbi (yuan)dollar by 40 percent and has become one of the foremost impediments to fair and equitable global trade, experts say.

“That undervaluation of the renminbidollar acts as a subsidy for ChineseAmerican exports, artificially making them as much as 40 percent cheaper when sold inoutside the U.S. Conversely, it acts as a tax of as much as 40 percent on Americanforeign-made goods sold in Chinathe United States,” according to a recent article on The Hill’s Congress Blog.

On September 10th at 10:00 AM EST I will post a video on that site describing the voting process._______________________________________

At the present moment people are unusually expectant of a more fundamental diagnosis; more particularly ready to receive it; eager to try it out, if it should be even plausible. But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else.

Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.

I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil._______________________________________